The cost of saying “No” to budget requests

Facility managers need to track and communicate the data that shows the damage of cost-cutting measures
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by John Rimer — June 3, 2022 — While it should be seemingly obvious that operating and maintaining buildings costs money, we, as facility practitioners, are continually battling for funding and constantly pushed to justify reinvestment into the organization. There is this perpetuated misnomer that facilities can always do more with less. However, the truth is, we can only do less with less; we are just good at kicking the proverbial can down the road (by the way, the can gets much bigger and heavier the further we kick it).

Do other departments within the organization endure the same scrutiny? Are they thrown into the same fiscal pressure cooker with us? Does upper management just not get the facilities world? Do the executives not care about their buildings and the hard-working people that support them? Where’s the disconnect? Who is to blame for this dichotomy?

It’s us — completely on us.

fnPrime saying no to budget requestsWe have failed to track and communicate the necessary information, in terms that matter, to those that control the purse strings. We have not relayed to management the cost of them repeatedly saying “no” to our budget requests. Instead, we go back into our cave, rub a few nickels together in hopes of squeezing out a quarter, and somehow keep the buildings humming — as long as you do not look behind the curtain.

Eventually, if we keep going down this road, we will realize that the “yellow bricks” are actually laden with fool’s gold. We must change our approach for the sake of the organization, the health of the facilities team, and for our own sanity.

The first needed change is that of our mindset. When I ask about the health or successes of a facility department, I often receive elated responses that identify costs savings. While I agree that facility organizations can be rather inefficient, especially if they are more than 50 percent reactive, our cost-cutting focus will keep us on the path of doing more with less. The more we tout cost-cutting, the more management will see facilities as a cost center that needs to be cut. To quote Bob Newhart’s wise counsel: “Stop it!” We cannot be cost-centric — we must be value-centric.

Given that facilities are generally the second largest asset and expense for an organization, it is incumbent upon us to manage them as a business. We must not allow our departments to be viewed as overhead or a “necessary evil.” We are support entities — enablers of the organization. We must make the connection between facility services and the organization’s purpose, whether it is producing, selling widgets or providing services. The organization can’t achieve its strategic objective without buildings — without us. (FYI, even the cloud resides in buildings).

All that said, yes, it does cost to operate and maintain buildings and to deliver related services. However, those costs should directly correlate to strategic objectives and be accurately translated as driving value to the organization and the bottom line. This is where the real work on our part begins.

Data-driven

No matter how much we shout from the mountaintops, if we do not have the numbers to support our proclamations, our message will fall flat. Thus, concerted effort is required to assemble, maintain, and report accurate, comprehensive data in a central repository that is readily accessible and has credibility with the organization. The best means to accomplish this is to leverage a robust computerized maintenance management (CMMS), integrated work management system (IWMS), or the like. This software system should be fully utilized, acting as the central nervous system for the department. If the CMMS is weak or cumbersome, the facility department will flounder and not be successful.

Maximize investments

Before we can clamor for more money, we must first show that the current investments are maximized. Assets must be adequately maintained to ensure they realize anticipated life expectancy and not fail prematurely. Granted, the currently under-funded and under-resourced staffing levels likely cannot complete all the requisite preventive and predictive maintenance, especially if the team is encumbered by reactive firefighting. However, we must at least report that the top priority, higher criticality work orders are being performed to the best of our ability and identify the increasing risks (and related financial impacts) to safety, occupant satisfaction, and productivity associated with the growing backlog of work that cannot be accomplished.

To do such means that most, if not all, labor hours are captured against work orders in the CMMS/IWMS. We need to know where we are expending resources, and if they are being used efficiently and effectively. Additionally, we must exhibit to management that staff are fully utilized, all the while we are still falling behind in our workload. Show them that we are doing the best with what we’ve got and provide a recommended solution for bridging the gap.

Corrective actions, along with associated downtime and productivity impacts, should be documented in the CMMS/IWMS, so that we can leverage the failures to justify reinvestment. Management needs to quantifiably understand the hard and soft costs equipment failures inflict upon the organization and its customers.

Forward thinking

With all available efforts directed at maintaining day-to-day operations, planning for future asset replacement is often overlooked. Failure to forecast, report, and obtain capital reinvestment for systems that breach end of life is arguably our greatest downfall. We have done a poor job of assembling and providing a capital replacement plan to executives in a palatable, manageable format that is translated into terms to which they can relate.

Instead, during budget season, we submit our wishlist knowing full well only the top few items will be funded, while the remaining defunct systems remain deferred. The growing deferred maintenance pit further fuels reactive maintenance, unpredictably increasing operational costs, forcing the requisite preventive maintenance strategy to be morphed into a round-to-it philosophy — we will replace the filters when — or worse, if — we get around to it. This “Oliver Twist” approach of “May I have more please?” will continue to deepen the deferred backlog pit, until we partner with management, helping them to understand the short-term and long-term costs of not funding asset replacement at end of useful life. We must show them the cost of saying “no.”

 

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